Sydney, July 18: Australian oil and gas producer Santos Ltd. said on Wednesday it was planning to build a liquefied natural gas (LNG) plant in the northern state of Queensland using processed coal seam gas.
Santos said the proposed single-train LNG plant in Gladstone, Queensland would have a capacity of about 3-4 million tonnes a year and would cost between A billion (.37 billion) and A billion, including upstream field development, liquefaction plant and related infrastructure.
''This is a landmark project for Santos which will underwrite the continued growth of the coal seam gas industry in Queensland and is a major step forward in the development of a new export industry for the state,'' Santos' Managing Director John Ellice-Flint said in a statement.
Santos shares rose 1.2 per cent to A.17 by 0107 GMT, compared with a broader market down 0.61 per cent.
Adelaide-based Santos said it expects to reach a final investment decision by the end of 2009 and plans to export the first LNG cargoes by early 2014.
Santos said its coal seam gas reserves and contingent resources currently total over 5,000 petajoules and have ''significant upside potential''.
The gas supply of between 120-220 petajoules per annum will be sourced from its coal seam gas fields in Queensland's Bowen and Surat Basin, Santos said.